Standing on the Sidelines: Why food and beverage companies must do more to tackle climate change

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Description: For the food and beverage industry, climate change is a major threat. For millions of people, it means more extreme weather and greater hunger. The Big 10 companies are significant contributors to ...

For the food and beverage industry, climate change is a major threat. For millions of people, it means more extreme weather and greater hunger. The Big 10 companies are significant contributors to this crisis, yet they are not doing nearly enough to help tackle it.
In this paper, Oxfam calls on the Big 10 to face up to the scale of greenhouse gas emissions produced through their supply chains, and address the deforestation and unsustainable land-use practices they allow to happen.
The Big 10 must set new targets to cut greenhouse gas emissions throughout their supply chains. But they cannot tackle climate risk by acting alone. They have a duty to step off the sidelines and use their influence to call for urgent climate action from other industries and governments.

186 OXFAM BRIEFING PAPER 20 MAY 2014

www.oxfam.org

Land being cleared and replanted with oil palms at the Butaw plantation, Sinoe County, Liberia (2014).
Anna Fawcus/Oxfam America
STANDING ON THE
SIDELINES
Why food and beverage companies must do more to tackle
climate change

For the food and beverage industry, climate change is a major threat. For
millions of people, it means more extreme weather and greater hunger. The
Big 10 companies are significant contributors to this crisis, yet they are not
doing nearly enough to help tackle it.
In this paper, Oxfam calls on the Big 10 to face up to the scale of greenhouse
gas emissions produced through their supply chains, and address the
deforestation and unsustainable land-use practices they allow to happen.
The Big 10 must set new targets to cut greenhouse gas emissions
throughout their supply chains. But they cannot tackle climate risk by acting
alone. They have a duty to step off the sidelines and use their influence to
call for urgent climate action from other industries and governments.
SUMMARY
The food and beverage sector: Accomplices to
the climate crisis
Climate change threatens the world‟s food and beverage industry like few
other sectors of business. It is a major risk to food supply chains, to
consumer demand, and ultimately to companies‟ future profitability. The
Big 10 food and beverage companies ― Associated British Foods (ABF),
Coca-Cola, Danone, General Mills, Kellogg, Mars, Mondelēz
International, Nestlé, PepsiCo and Unilever ― are significant emitters of
greenhouse gases (GHGs) across their global operations. If together
they were a single country, these 10 famous companies would be the
25
th
most polluting country in the world, emitting more GHGs (263.7
million tons per annum) than Finland, Sweden, Denmark, and Norway
combined.
1
They are not doing nearly enough to cut their own carbon
footprint.
But worse, they are failing to use their experience, leadership, and power
to transform their own industry and push for the level of climate action the
world needs. The Big 10 are being silent accomplices to this unfolding
crisis. It is a serious charge because these companies should be fully
aware of the impact that climate change is having on the planet‟s food
system, given their dominance and reach into it. Two companies in
particular, Kellogg and General Mills, are clear laggards among the Big
10. Both companies are highly vulnerable to climate impacts but also well
positioned to lead the industry towards a more sustainable future.
Climate change is contributing to storms, floods, drought, and shifting
weather patterns. These are causing crop failures, food price spikes, and
supply disruptions. The end result will be more poverty and hunger. By
2050, there could be an extra 25 million malnourished children under the
age of 5 because of climate change,
2
and 50 million more hungry
people.
3
This is the human dimension of the climate change crisis that is
already unfolding.
The poorest, most vulnerable people are being hit first and worst. But all
of us will be affected. In major markets like the US and the UK, Oxfam
calculates that climate change will drive up the retail price of products like
General Mills‟ Kix cereal by up to 24 percent and Kellogg Corn Flakes by
as much as 44 percent over the next 15 years. Such retail price hikes are
the consequence of rising prices of commodities like corn and rice,
projected to double by 2030, with half of the increase due to climate
change.
4

Some of the Big 10 companies are already being hit financially because
of climate change. In March 2014, General Mills‟ CEO Ken Powell, said
that in the previous fiscal quarter, extreme weather had dampened sales
and cost his company 62 days of production, or the equivalent of 3–4
percent of production, “which hasn‟t happened in a long time to us, think
decades”.
5
Unilever says it now loses €300 million ($415 million) a year
due to extreme weather events such as flooding and extreme cold.
6

The Big 10 are failing to do
all they can to cut
greenhouse gas emissions
from their supply chain.
If the Big 10 food and
beverage companies were
a single country, it would
be the 25
th
most polluting
country in the world.
Oxfam calculates that climate
change will drive up the retail
price of products like General
Mills‟ Kix cereal by up to 24
percent and Kellogg Corn
Flakes by as much as 44
percent over the next 15
years.
2
The fossil fuel industries are the biggest “climate villains” but the
agriculture sector is a massive problem too. The latest report from the
Intergovernmental Panel on Climate Change (IPCC) shows that
agriculture and deforestation (largely driven by expansion of agricultural
land) are responsible for around 25 percent of global emissions.
7
But
even more significantly, when experts calculate how far we need to cut
emissions for the world to stay within a “safe” 2°C temperature rise, they
assume that total emissions from these two sources will stop entirely by
the middle of this century, and indeed become a net “carbon sink”,
working to remove carbon dioxide from the atmosphere.
8
However,
agricultural emissions are actually set to increase by 30 percent by 2050
as demand for food increases,
9
and the latest research suggests that
deforestation rates are also still rising.
10
Turning global agriculture and
forestry into a net carbon sink will not happen without huge new efforts
by companies and governments.
The agricultural industry faces a daunting double responsibility – to do its
part to ensure “zero hunger” while undergoing a fundamental revolution
in its production methods. This is something the Big 10 have not properly
grasped. Between them, they generate $1.1 billion a day in revenues,
equivalent to the gross domestic product (GDP) of all the world‟s low-
income countries combined.
11
They have the economic power to drive
the required transformation of the food system and to influence the
direction of the wider global economy. Their vested interests coincide
with the world‟s need for a cleaner and more equitable global food
system and a sustainable energy system. But they are not properly
acting upon this coincidence.
Not acting on their own emissions footprint
When it comes to getting their own house in order, Oxfam research into
the policies of the Big 10 shows that the industry has a very patchy
record, which for some companies verges on downright negligence.
Kellogg and General Mills are among the worst performers in this regard.
All of the Big 10 have set targets to reduce emissions from their
operations (so-called “Scope 1 and 2” emissions, which account for 29.8
million tons).
12
But in the main, these targets are not science-based ―
they are based on what the company says is feasible, rather than on
what is really needed or justified. But even more significantly, they do not
cover the major share of the emissions for which the company is
responsible ― the indirect emissions associated with the company, from
their supply chains to the end use of their products (so-called “Scope 3”
emissions, which account for 233.9 million tons).
13
The largest part of
these unaddressed emissions across the Big 10 is from the production of
their agricultural raw materials (approximately 114.1 million tons).
14
This
includes both the direct emissions caused by agricultural production ―
like nitrous oxide released from fertilizer usage, and methane released
from livestock ― and the indirect carbon emissions caused by expansion
of agricultural land into forests. The impact of these agricultural
emissions alone is the same as the carbon emissions of around 40 coal-
fired power stations each year
15
― too big for any responsible company
to ignore.

The IPCC estimates that
agriculture and deforestation
account for 25 percent of
global emissions. Yet
emissions scenarios to keep
global warming below 2ºC
assume these sources will
become a net carbon sink by
mid-century, despite rising
emissions trends.
The largest source of the Big
10's emissions is agricultural
production of their raw
materials ― comparable to
the annual emissions from 40
coal-fired power stations ―
yet these are not covered by
the companies' emissions
reductions targets.
3
All of the Big 10 companies recognize that they need to reduce their
agricultural emissions, and seven of them measure and report these
Scope 3 agricultural emissions through the Carbon Disclosure Project
(CDP) each year, though pointedly Kellogg, General Mills, and
Associated British Foods fail to do even that. But from there, things slide
downhill. Most companies do not disclose suppliers of commodities
driving the most emissions (Unilever, PepsiCo, Nestlé, and Coca-Cola
are honorable but partial exceptions here), and none of them have
committed to a target to reduce their total agricultural emissions or
require their suppliers to make reduction targets.
The Big 10, but especially Kellogg and General Mills, are not addressing
the vast bulk of their emissions in the reduction targets they are setting
― the huge “Scope 3” emissions, including those associated with the
production of agricultural raw materials within their supply chains. Oxfam
calculates that Scope 3 emissions from agriculture alone make up
around 50–60 percent of the global emissions footprint of the Big 10
companies, with total Scope 3 emissions accounting for 80–90 percent of
their total responsibility (see Figure 3).
16
As oversights go, this is a
terribly big one to be making.
To their credit, and thanks to the great campaigning by people‟s
movements and NGOs in recent years, most of the Big 10 have now
committed to ending deforestation in their supply chains for palm oil, one
of the biggest drivers of deforestation. This is important, as Oxfam‟s
investigations have revealed that General Mills, Kellogg, and other
companies remain the ultimate beneficiaries of supply chains, which
continue to tolerate massive deforestation and land clearances that are
causing high-levels of GHG emissions, not to mention human rights
abuses and worsening poverty and hunger among local communities.
But only very few of the companies have set concrete plans to implement
and monitor these policies or to extend them to other key commodities
that are driving deforestation, like soy, sugarcane and maize. Without
these plans, the encouraging commitments that have been made may
prove to be little more than warm words and paper promises, with little
scope for local communities and others in civil society to hold them to
account. And having made such commitments on palm oil, there is now
no excuse for not replicating them across all commodities that have an
impact on forests and the people whose livelihoods depend on them.
17

Not vocal enough about the climate action
needed from others
Finally, the Big 10 have, for the most part, remained silent in public
debates over climate action. With a few notable exceptions ― Unilever,
Nestlé, and, to some extent, Coca-Cola and Mars ― most do not speak
out about the need for governments and other businesses to act, despite
spending millions of US dollars on political lobbying each year.
18
Most
refrain from publicly challenging the backward stances of trade
associations that represent them. Only two have signed the Trillion Tonne
Communiqué (a recent business statement recognizing the limited global
carbon budget).
19
Their silence leaves the field open for the dirty fossil
fuel industries to dominate the debate with policy-makers.
Most of the Big 10 have now
committed to zero
deforestation in their palm oil
supply chains, but many lack
robust and transparent
implementation plans, and
few have extended these
policies to other key
commodities.
The Big 10 are largely silent
witnesses in public debates
on climate action, despite
spending millions of US
dollars on political lobbying
each year.
4
In the intensive corporate lobbying on the 2009 US climate change
legislation in Congress, the Big 10 were all but absent in a debate
dominated by players from energy and biofuel industries ― submitting
just 19 lobby reports between them, compared with more than 200 by the
biggest 10 energy companies, and more than 100 by biofuels companies.
The Big 10 are being too coy. They have exercised their political clout
before, by pushing the European Union (EU) and other decision-makers
to improve their biofuels policies and numerous other policy issues. It is
time they lent their weight to the broader fight over climate policy.
Time to act
The food and beverage industry has both a moral imperative and a
corporate responsibility to step up its efforts to tackle climate change.
The Big 10 are uniquely placed to reveal the risks of climate change to
their investors and to our global food chain. Kellogg and General Mills in
particular must reverse their position as climate laggards. Companies
must ensure that their supply chains are able to produce ingredients in
more equitable and sustainable ways, including moving towards
production and land-use methods that diminish GHG emissions and
replenish carbon sinks. If each of the Big 10 companies made the same
commitment to cut emissions from agriculture as PepsiCo UK, together
they could save an extra 80 million tons of CO
2
e compared to business-
as-usual by 2020.
20

The Big 10 need to set new targets to cut GHG emissions throughout
their supply chains and, where necessary, to support their suppliers in
doing so. They need to transparently implement and extend their
laudable new deforestation policies to all commodities. And critically, they
need to step off the sidelines and lead the call on other industries and
world leaders for more progressive, more equitable, and cleaner energy
and food policies. In the fight for zero hunger in a safer climate, the
silence of the food and beverage industry is not a virtue.
5
1 FOOD COMPANIES,
CLIMATE RISK, AND
HUNGER
The Big 10 and the global food crisis
In 2013, Oxfam launched Behind the Brands as part of its GROW
campaign.
21
GROW calls on governments and companies to build a
better food system: one that sustainably feeds the growing global
population and that empowers poor people to earn a living, feed their
families, and thrive. Behind the Brands tracks 10 of the world‟s biggest
food and beverage companies, assessing their policies and their
commitment to helping create this system. The Big 10 are: Associated
British Foods (ABF), Coca-Cola, Danone, General Mills, Kellogg, Mars,
Mondelēz International, Nestlé, PepsiCo, and Unilever. Together, they
generate revenues of over $1.1 billion every day.
22

The Behind the Brands scorecard ranks the Big 10‟s policies and
commitments in seven critical areas: women, small-scale farmers, farm
workers, water, land, climate change, and transparency.
23
Of these,
climate change is where the Big 10 arguably have the most direct
economic interests at stake. But while some companies have begun to
address their climate footprint, others are showing worrying negligence in
the face of an urgent global crisis.
None of the 10 companies is doing all it can to use its influence to
change food production practices and public policy at local, national, and
global levels, but General Mills and Kellogg stand out at the bottom of the
pack. Even though these two companies are well positioned to lead both
the food and beverage industry and the political system towards more
ambitious action to address climate change, their current policies fail to
measure up.
Climate change spreading hunger
Climate change is magnifying global poverty and hunger. Consumers and
farmers around the world are already feeling the impacts of climate
change in their stomachs and their pockets, as acute and chronic climate
disasters cause crop losses, food shortages, and price shocks.
Production losses and price shocks have pushed millions of people
deeper into poverty, and led to widespread hunger and social unrest.
24

In its March 2014 scientific assessment, the Intergovernmental Panel on
Climate Change (IPCC) concluded that climate change has already
lowered wheat and maize yields in many regions and, on average,
globally since the 1960s.
25
Going forward, it projects that climate change
will reduce growth in global food production by up to 2 percent each
decade, even as global food demand rises by 14 percent per decade
over the same period.
26

The IPCC concludes that
climate change has
already lowered yields of
wheat and maize in many
regions and, on average,
globally since the 1960s.
6
Agricultural regions in the world‟s poorest countries will feel the effects of
climate change most acutely. Across Africa and South Asia, crop yields of
wheat, maize, sorghum, and millets are expected to be reduced by about
8 percent by 2050.
27
In some African nations, by 2020, yields from rain-
fed agriculture could fall by 50 percent.
28
Climate change is projected to
reduce agricultural productivity by between 9 percent and 21 percent
throughout Asia, Africa, and Latin America by 2080.
29
Wheat yields in
South Asia could plummet by 50 percent by 2050, while rice yields are
predicted to decline by 30 percent in the Middle East and North Africa.
30

In Guatemala, rainfall shortages during peak growing seasons have
caused serious harvest declines, including an 80 percent drop in maize
crops in 2013. Soaring temperatures destroyed up to 40 percent of
Guatemala‟s coffee harvests in 2013–2014, putting thousands of
agricultural laborers out of work.
31

With yields struggling to keep pace with demand, the price of key
commodities will rise. Oxfam projects that world market prices of key
staple crops could approximately double by 2030, with around half of the
increase driven by climate change impacts, while the IPCC suggests that
prices could rise by up to 84 percent by 2050 due to climate change.
32

More extreme weather will mean further short-term price hikes on top of
this. Another drought in 2030 like that which hit the US Midwest region in
2012 could see the world market price of corn rocket by an additional 140
percent.
33

The IPCC shows that crop losses from extreme weather are already
leading to volatility in global food prices. The 2010 Russian heat wave
and subsequent wheat export ban contributed to global wheat prices
more than doubling by the end of that year (see Figure 1).
34
The World
Bank estimates that since June 2010, rising food prices have resulted in
an additional 44 million people living in extreme poverty in low and
middle-income countries.
35

7
As climate change makes food more expensive, all consumers will suffer.
This includes poor rural communities, which purchase more food than
they produce, as well as poor urban consumers, who may spend
upwards of 50 percent of their incomes on food. The result of all this is
clear: greater hunger. The IPCC cites research estimating that nearly 50
million more people could go hungry by 2050 because of climate change
― equivalent to the population of Spain.
36

Production shocks hurt food companies too
Production shocks and climate-induced price spikes don't just harm
consumers, they also hurt companies‟ bottom lines. Economic losses
from climate change pose a significant financial risk. In 2011, the worst-
recorded drought in Texan history cost the agriculture sector
$7.6 billion.
37
The previous year, exceptionally heavy rains and flooding
in Guatemala caused a $4 million loss for Fresh Del Monte Produce‟s
banana operations, resulting in a $9 million loss in profits.
38
Bunge, the
global commodity trading firm, reported a $56 million loss in its sugar and
bioenergy sector during one quarter of 2010, primarily due to drought in
its growing areas.
39
When Russia banned wheat exports following severe
droughts in 2010, it “rippled through the stock market […] separating
winners from losers. Shares of food makers that face rising wheat costs
fell, with General Mills dropping 2.2 percent.”
40

In January 2014, Coca-Cola‟s Vice-President for environment and water
resources described “increased droughts, more unpredictable variability,
100-year floods every two years” as problems disrupting the company's
supply chain for sugarcane and sugar beets, as well as citrus for its fruit
juices. “When we look at our most essential ingredients, we see those
events as threats,” he said.
41
Paul Polman, CEO of Unilever, estimates
that the company loses €300 million ($415 million) a year due to extreme
weather events such as flooding and extreme cold.
42

In March 2014, General Mills told investors that extreme weather had
disrupted production and operations and dampened sales, undermining
their quarterly earnings. “We lost 62 days of production, which would be
three or four percent,” said Ken Powell, CEO of General Mills, explaining
that “this year's severe winter weather dampened sales performance
across the food industry”.
43
Extreme weather disrupted oat shipments
necessary to make brands like Cheerios, spiking the cost of production,
according to Powell.
Climate change is likely to have a significant impact on the future price of
products sold by the Big 10, with further dramatic consequences for
sales. Oxfam estimates that higher grain prices driven by climate
disruption could drive up the retail price of products like Kellogg‟s Frosted
Flakes (Frosties UK) by between 10 and 20 percent in the US and 15 to
30 percent in the UK by 2030. The price of Kellogg Corn Flakes could
spike by between 15 and 30 percent in the US, and between 22 and 44
percent in the UK. The price of General Mills‟ Kix cereal could go up by
between 12 and 24 percent in the US.
44
Given the relationship between
price and the amount of cereal purchased by consumers in the ready-to-
eat breakfast cereal market, retail price increases of that magnitude
would likely slash the volume of cereal sales by at least an equivalent
percentage.
45

“Increased droughts, more
unpredictable variability,
100-year floods every two
years... When we look at
our most essential
ingredients, we see those
events as threats.”
Jeffrey Seabright, Vice-
President for environment
and water resources,
Coca-Cola
“This year's severe winter
weather dampened sales
performance across the
food industry.”
Ken Powell, CEO, General
Mills
8
Box 1: The US heartland faces climate change
Across the farming heartlands of the US, farmers are concerned about the
changes they are seeing in weather patterns; changes that leave some
fearful about the future of agricultural production and questioning how they
can make a living in the face of so much uncertainty.
Richard Oswald remembers when he was a boy growing up in Langdon,
Missouri, how regular the rain used to be. But in May 2011, his fields and
many others across Langdon took a terrible beating when the river flooded,
swollen by record snowfall in the Rocky Mountains and unprecedented
rainfall in Montana, Wyoming, and the Dakotas. The river scoured craters
in the fertile land and blanketed it with sand. For five months, Oswald‟s
farm was under water.
Oswald blames climate change, in part, for the flooding, which eventually
led to more than $2 billion in damages, in a year in which Missouri alone
had three declarations of major disasters. The devastation on that river
bottomland, where harvests of soybeans and corn flow into global food
supply chains, contributed to record high prices of grains that year.
Oswald normally farms corn, which is processed into corn starch and sold
on the commercial market. From there it would likely end up as thickener in
any number of products made by major food and beverage companies. But
this year, “there was nothing to harvest,” said Oswald. “We spent all the
money for inputs ― seed, fertilizer, herbicides ― and got nothing in return.”
Food companies acknowledge climate risk
Food and beverage companies have both a moral responsibility and a
compelling economic incentive to reduce GHG emissions throughout
their supply chains and lead the wider fight against the climate crisis.
Seventy percent of companies responding to the latest Carbon
Disclosure Project (CDP) survey admit that they think climate change has
the potential to significantly impact their revenues, with many warning
that they expect climate impacts to be felt within the next five years.
46

All of the Big 10 companies acknowledge that production and supply
shocks stemming from climate change represent a significant risk to their
bottom line.
47
For example, Kellogg stated in 2013:
“As a company dependent on a consistent supply of agricultural raw
materials, Kellogg is exposed to potential risks associated with changes
in weather patterns and their impacts on the growing cycle. Our business
operations could also be disrupted by extreme weather events, such as
hurricanes and drought. Changes in precipitation patterns, reservoir
levels, snowpack, and average temperatures may increase the stress on
freshwater supplies. Changes in soil and moisture conditions may
change the types of crops present in the areas where we currently
source our agricultural crops. These issues could have impact on our
global supply chain…”
48

Yet despite this awareness, major food and beverage companies have
been slow to address their own GHG emissions footprint, and do little to
press governments and other businesses to increase their climate action.
Kellogg and General Mills in particular are dragging their feet when it
comes to measuring their true footprints and turning awareness into
action. It is time for them to align their business practices with the climate
risks they themselves acknowledge.
Oxfam estimates that higher
grain prices driven by
climate disruption could
drive up the retail price of
products like Kellogg‟s Corn
Flakes by between 15 and
30 percent in the US, and
between 22 and 44 percent
in the UK over the next 15
years.
9
2 CLEANING UP THE
FOOD AND BEVERAGE
SECTOR
Greenhouse gas emissions and the food system
While burning fossil fuels is the single biggest driver of greenhouse gas
(GHG) emissions that cause climate change, agriculture, deforestation
and land-use change are also significant contributors to the problem.
Oxfam's best estimate based on available data is that globally, the entire
food system ― including sources from production of agricultural inputs
like fertilizer, to emissions from agricultural production, refrigeration and
transport ― accounts for approximately 25–27 percent of global
emissions (see Figure 2).
49
That's greater than the emissions of all the
cars, planes and ships on the planet.
50

The largest share of these emissions are from direct agricultural
production ―such as emissions of nitrous oxide from fertilizer usage or
methane from livestock ― and from deforestation driven by expansion of
agricultural land into forests and other carbon “sinks”.
Figure 2. Global GHG emissions and food system emissions

Sources: IPCC (2013); Vermeulen et al. (2012); FAOStat
At around a quarter of global emissions, reductions from the food system
could make a major contribution to global efforts to tackle climate change.
But what is perhaps even more significant is that the latest scenarios for
keeping global warming below 2ºC, as described in the IPCC's Fifth
Assessment Report, assume that net emissions from agriculture and
deforestation (a sector the IPCC terms “Agriculture, Forestry and Land-use
Change” or “AFOLU”) will effectively end entirely and that the sector will
become a net carbon sink by the middle of the century.
51

10
This is a critical assumption, because in the absence of this huge new
carbon sink, the rapid transition needed in our global energy system to
keep global warming below the 2ºC target agreed by governments at the
UN will only be possible with a huge scaling-up of as yet unproven and
highly risky Carbon Capture and Storage technology (see Appendix). It is
therefore clear that while major emissions reductions from agriculture
and deforestation will not be sufficient to tackle climate change alone,
they are certainly a necessary, indeed vital part of efforts needed to stay
below 2ºC of warming.
Worryingly, emissions trends in this sector are currently heading in the
opposite direction. New research from the United Nations Food and
Agriculture Organization (FAO) shows that emissions from agriculture
have increased significantly over the past 50 years and even more so
over the past decade, and are set to increase another 30 percent by
2050.
52
Meanwhile, the most recent research, not included in the latest
IPCC report, suggests that global deforestation rates are continuing to
rise, despite progress in some areas.
53

Greenhouse gas emissions and the Big 10
The Big 10 companies are significant emitters in their own right. If they
were a country, their combined emissions across their operations and
supply chains would make them the 25
th
biggest polluter, with emissions
higher than oil and gas producers like the United Arab Emirates and
Qatar, and comparable to the emissions of Denmark, Finland, Norway,
and Sweden combined.
54

According to their submissions to the Carbon Disclosure Project (CDP)
― an international NGO that assesses companies‟ ecological impact,
and is considered the gold standard for reporting across industries ― the
clear majority of these emissions do not come from the operations of
offices and manufacturing plants (accounted as so-called “Scope 1 and
2” emissions). They come instead from indirect sources, including the
end use of the companies' products and their supply chains ― most
notably from the agricultural production of their raw materials (so-called
“Scope 3” emissions) (see Figure 3). This is largely driven by industrial
production of commodities like palm oil, soy, sugarcane, maize, wheat,
rice, and livestock, including over-use of chemical fertilizer and
deforestation through cropland expansion.

Source: Oxfam analysis of CDP submissions. “Agricultural production” is estimated based on Scope
3 category: “purchased goods and services”.
In their CDP submissions, the Big 10 acknowledge the significance of
their agricultural emissions. Kellogg, for example, notes that they have
“assessed the environmental footprint of several of our products... These
footprints led us to understand that most carbon impacts associated with
our products exist in the agricultural phase of our products' life-cycle”.
55

Mars reports that 86 percent of its footprint comes from Scope 3 sources,
and 56 percent of its total GHG emissions are generated from agricultural
raw materials.
56
Elsewhere, General Mills reports
57
that 41 percent of its
emissions come from agriculture alone, with another 14 percent from its
packaging supply chain, and 7 percent from ingredient production.
58

Scope 3 emissions represent 80–90 percent of all the Big 10‟s emissions,
while Scope 1 and 2 emissions make up the remaining 10–20 percent.
Their Scope 3 emissions can be broken down further, with agricultural
production emissions accounting for around 50–60 percent of total
emissions across the Big 10 companies.
59
These Scope 3 emissions
from agricultural production of the Big 10 alone are greater than all of the
Scope 1 and 2 emissions of every other sector among the “Global 500”
biggest companies reporting to CDP other than energy, utilities and
materials.
60
On an annual basis, they are comparable to the emissions of
around 40 average coal-fired power stations,
61
or similar to building four
Keystone XL pipelines.
62
Yet the Big 10 have so far failed to meaningfully
address them.
In the years ahead, the food sector must rise to the challenge of reducing
its climate impact at the same time as meeting growing demand for food
and ensuring that no one on the planet goes hungry. Options exist to
reduce emissions by shifting away from a model of industrial agriculture
to more sustainable and agro-ecological approaches.
63
In addition,
significant emissions reductions can be achieved by cutting out food
waste and shifting diets.
64
The Big 10 cannot achieve all of this single-
handedly; but as major players in the sector, they must lead the way.
The emissions from
agricultural production of the
Big 10 alone are comparable
to the annual emissions of
around 40 coal-fired power
stations.
12
Box 2: General Mills and Kellogg at the bottom of the pile
The Big 10 ― particularly General Mills and Kellogg ― are failing to drive
adequate emissions reductions within their supply chains to help lead the
sector towards sustainability. The Big 10 post combined annual revenues
of more than $450 billion, equivalent to the gross domestic product (GDP)
of all the world‟s low-income countries together.
65
Their supply chains are
present in every part of the global food system, from farmers to consumers.
Shifts in how they do business have the potential to transform the entire
food sector.
66

But change is coming far too slowly. Oxfam‟s analysis shows that while
some Big 10 companies, such as Nestlé and Unilever, are making
improvements in how they trace commodities along their supply chains and
in reducing their carbon footprint, others, particularly Kellogg and General
Mills, are dragging their feet at best. Unlike most other Big 10 companies,
Kellogg and General Mills have failed even to report annually through CDP
on their GHG emissions stemming from their agricultural supply chains ―
by far the largest source of their emissions.
67

Kellogg gets positive marks on Oxfam‟s Behind the Brands scorecard
68
for
disclosing its exposure to deforestation risk and asking suppliers to reduce
their emissions. But the company does not measure and disclose its GHG
emissions associated with agricultural production, and lacks specific targets
for reducing emissions from its supply chain. As a result, it scores just 4 out
of 10 on climate change.
General Mills scored a meager 2 out of 10 on climate change. Although its
2013 sustainability report indicates that more than half of its emissions
came from agriculture and packaging in its supply chain, the company has
so far failed to annually report those emissions through CDP or to set
reduction targets for its own agricultural emissions, and has made no such
requirements for its suppliers.
69

In a study by Climate Counts, which evaluated companies‟ GHG emissions
goals, Kellogg ranked 60th out of 100 companies surveyed, and was rated
“not sustainable”. General Mills ranked even lower, at 65th, similarly “not
sustainable”.
70
Kellogg also ranks near the bottom of the Big 10 on
sustainability scorecards produced by the World Wildlife Fund and the
Union of Concerned Scientists.
71

There are some signs of progress though. Overall, the Big 10 have
improved disclosures of their GHG emissions and climate risks, principally
through the CDP.
72
In their words if not their deeds, even foot-dragging
companies like General Mills have acknowledged the crisis of climate
change and the need for urgent reforms. Responding to questionnaires
from CDP, General Mills stated, “Climate change is a serious issue with
broad implications for agriculture and the world‟s food supply. We see a
clear role for responsible companies to help mitigate the risk of climate
change. Our primary focus is reducing our GHG emissions in our
operations through improved energy efficiency and the use of low-carbon
energy sources.”
73

Acknowledging climate change and making minimal reductions to
operational emissions is a start, but it is not nearly enough. Any company
that is serious about addressing its emissions must go beyond its own front
door.
13
Rating the Big 10 on measuring, reporting and
reducing emissions
All of the Big 10 now report on “Scope 1 and 2” emissions from their own
operations, and some are taking reasonable steps to reduce them by, for
example, insulating buildings and improving energy efficiency. Mars has
recently shown climate leadership ― for example, through its
commitment to eliminate fossil fuel energy use and GHG emissions from
its direct operations by 2040.
74

But for the most part, companies have set GHG reduction targets
according to an arbitrary set of metrics. Scientific consensus has shown
that any global temperature rise at or above the 2°C threshold would
have catastrophic impacts on communities and ecosystems globally. Yet
companies are not measuring their targets against this threshold. Current
vague commitments do little to guarantee truly sustainable emissions
reductions. A recent analysis of their operational GHG emission reduction
goals found that neither General Mills nor Kellogg have targets that are
“sustainable” when measured against what the science demands.
75

But even more significant is that these companies' emissions reduction
targets do not cover the majority of their emissions. “Scope 1 and 2”
emissions represent only a small proportion of the food and beverage
giants‟ contribution to climate change. The companies' targets effectively
ignore the single largest source of emissions in their value chains ―
those stemming from agricultural production of their raw materials
(classed as “Scope 3” emissions).
Oxfam's research shows that all of the companies recognize the need to
reduce agricultural emissions, and 7 of the 10 report and disclose these
emissions annually through the CDP, though General Mills, Kellogg, and
ABF fail to do even that. However, none of the Big 10 have set clear
targets to actually reduce these agricultural emissions (see Figure 4).
These targets are crucial to incentivize real reductions. Unilever and
Coca-Cola have set reduction targets across the life-cycle of their
products, such as Coca-Cola‟s target of a 25 percent emissions reduction
for the “drink in your hand”.
76
Such targets are commendable, but do not
guarantee that emissions from agricultural production will decline (as
reductions could all be delivered elsewhere in the product's life-cycle).

All of the Big 10
companies recognize the
need to reduce their
agricultural emissions,
which account for 50–60
percent of their total
emissions. Yet none have
set targets to do so.
14
Figure 4. The Big 10 rated on policies to address agricultural
emissions in supply chains
77

Because Scope 3 emissions are, by definition, controlled by the suppliers
of goods and services, the Big 10‟s supplier codes are the most powerful
way for companies to bring about significant GHG emission reductions.
Accurate data can be an effective motivator for change. If companies do
not measure and understand where their emissions are coming from,
they have no way of identifying where reductions can be made. Strong
data reporting can also capture land-use change emissions, one of the
primary drivers of emissions globally.
If companies are serious about meeting their moral and business
obligations to help address climate change, they must begin to measure
and set targets to reduce emissions that occur outside their own four
walls. Companies must use their supplier codes to require suppliers to
measure and disclose GHG emissions, and to establish clear,
quantifiable reduction targets.
Measurable targets are critical to driving emissions down over time.
Vague guidelines that ask suppliers to “aim to” reduce their emissions are
unlikely to produce any real reductions. No company in the Big 10
requires suppliers to commit to meaningful targets to reduce their
greenhouse gas emissions. Unilever and Nestlé generally ask their
suppliers to reduce their agriculture-related emissions, but do not require
them to establish specific reduction targets.

15
Destroying forests and carbon sinks
One of the most damaging causes of Scope 3 emissions comes from
deforestation and changes in land-use, such as agricultural expansion
into carbon-rich vegetated areas to make way for commodities like soy,
palm oil, maize, and sugarcane. Oxfam‟s investigation has found
evidence and threats that companies supplying palm oil to suppliers of
Kellogg and General Mills are recklessly clearing forests and burning
peatlands.
Worldwide, clearing of forests and other vegetated lands for agriculture is
the main driver of deforestation
78
and accounts for about a third of all
GHG releases from the food system (see Figure 2).
79

The scale of forest loss is staggering. Between 2000 and 2010, around
13 million hectares of forests were lost or converted to agriculture. This
amounted to a net global forest loss of 5.2 million hectares, roughly the
size of Costa Rica.
80
Deforestation is by far the most common means of
expanding agricultural operations: in tropical regions, approximately
75 percent of all new agricultural land is the result of forest destruction.
81

Leading food and beverage companies and their supply chains are a
significant driver of global deforestation and land clearance.
Land-use change and palm oil’s social
footprint
In addition to GHG emissions, land clearing often produces harmful
social impacts. Oxfam has previously highlighted the issues of land grabs
and land conflicts in agricultural supply chains, particularly in sugar, soy,
and palm oil plantations.
82
The loss of access to land and natural
resources brings with it a loss of food security and traditional cultural
practices and livelihoods. The establishment of plantations and the
consequent use of fertilizers and pesticides often lead to pollution of
drinking and fishing waters, harming community health and the ability to
grow crops or to fish. Poor labor conditions are also widespread.
The palm oil sector has generated numerous harmful social impacts. In
Indonesia alone, 4,000 unresolved palm oil-related land disputes have
been documented,
83
many involving loss of forest and natural resources.
People in these communities often end up as smallholders in outgrower
schemes, or laborers who endure harsh working conditions with little
economic benefit.
84
Yet palm oil has the potential to contribute
significantly to local and regional economic growth if produced
sustainably, safeguarding the climate and respecting host communities
around the plantations (see Box 5).
Under current industrial practices, the production of palm oil involves
widespread deforestation and destruction of carbon-rich peatlands.
Malaysia and Indonesia account for more than 85 percent of the world‟s
palm oil production, with Indonesia supplanting Malaysia as the top
producer in the past decade.

Leading food and beverage
companies and their supply
chains are a significant
driver of global deforestation
and land clearance.
16
Between 2000 and 2012, the proportion of Malaysian land used to
cultivate palm oil grew by roughly 50 percent, or 17,000 km
2
. During that
time, Malaysia experienced the world's highest rate of forest loss, totaling
47,278 km
2
― an area larger than Denmark.
85

In Indonesia, the land area devoted to oil palm plantations has grown
nearly eightfold over the past 20 years.
86
Deforestation has expanded
dramatically, doubling from 10,000 km² annually in the early 2000s to
20,000 km² a year by 2011–2012.
87
From 2000 to 2010, the island nation
released between 2 percent and 9 percent of the world‟s tropical land-
use carbon emissions.
88
Worryingly, Indonesia plans to double production
by 2020, compared to 2009 levels.
Oxfam‟s research in Indonesia and Liberia has shown that Kuala Lumpur
Kepong (KLK) ― a company that sells palm oil to one of the major
traders, Cargill, which, in turn, supplies General Mills and Kellogg ― is
embroiled in allegations of large-scale ecological destruction linked to
climate change, and poor treatment of communities living on and near
their plantations.
Box 3: Deforestation in the Indonesian palm oil supply chain

In June 2013, burning Sumatran forests produced a haze that darkened
South-East Asian skies for hundreds of miles. The haze drifted from Riau
province, Indonesia, and made air unbreathable in cities and towns across
several countries, including Singapore, Brunei, Malaysia, and Thailand.
Indonesia is the largest producer of palm oil in the world,
89
and most of it
comes from Riau province, where the fire originated.
As recently as March 25, 2014, commodities trader Cargill, which has
supplied both General Mills and Kellogg with palm oil,
90
received 2,002
metric tons of palm kernel oil from Indonesian palm oil producer PT Adei
Plantation & Industry, which has large-scale operations in Riau province.
91

Some owners of palm plantations in Riau province often use burning to clear
land of old growth,
92
but the fires can get out of control, burning large areas
of forest and releasing high levels of greenhouse gases. The 2013 fire was
suspected to have been started on land intended for palm oil production in
the Bengkalis regency, in Riau province.
93
Two high-ranking executives from
PT Adei are currently standing trial at the Pelalawan district court, accused of
burning land in Bengkalis regency and contributing to the toxic haze.
94

17

PT Adei is a subsidiary of Malaysian giant KLK, a multinational corporation
headquartered in Ipoh, Malaysia. In a response to Oxfam, KLK denied any
wrong doing and referred to the outcomes of an investigation that the
Roundtable on Sustainable Palm Oil conducted directly after the fire in July
2013 that cleared them from accusations of burning.
95

The Indonesian National Council on Climate Change and the Japan
International Cooperation Agency estimated that the fires in Riau emitted
between 36 million and 49 million tons of carbon dioxide.
96
That is equivalent
to the annual emissions of 10.3 million cars, or more than all of the cars in
Los Angeles, New York City, and Chicago combined.
97

In 2001, another PT Adei executive was tried and convicted for the same
crime.
98

The air pollution caused by the fires is immediate. But GHG emissions from
practices like burning forests are driving a changing climate in Indonesia and
wreaking more long- lasting damage on people‟s lives. In Riau province,
people report more flooding, more drought, and volatile food prices. People
are struggling to feed their families.
99

PT Adei is also accused by local people of forcing farmers from their land
with little compensation, destroying forests used by the community to grow
food, and polluting and diverting the river, which is vital to the food security
and income of communities where the company operates.
100

KLK, in its response to Oxfam, states that it has provided jobs to 5,307
people, paid above the minimum wage, that the smallholders linked to the
plantation benefit from a continuous stream of good income, and that they
have provided medical amenities and schools.
101

However, villagers told Oxfam that before the company arrived, people had
enough food and income to live on. They used their land to grow basic crops
like rice, corn and cucumber, which they used to eat and sell. They also
harvested rubber and gum from the forest and sold it, and obtained herbs for
their traditional medicines.
102

“Before the company arrived to our village, I was much happier. I didn‟t need
to worry about getting food on the table for my husband and my children,”
explains a female villager, who could not be identified for security reasons.
103

Most villagers were offered a job with the company as laborers, but many
have quit because they didn‟t make enough money to live on. Some say their
children have been forced to drop out of school because they can no longer
pay the fees.
104

Global demand for palm oil is growing by 4–5 percent annually, and is
expected to double by 2050.
105
Industrial production is expanding into
Africa and Latin America. In countries such as the Democratic Republic
of Congo (DRC) and Liberia, palm oil companies ― often the same
conglomerates dominating South-East Asia ― are acquiring lands for
plantations. All too often, this expansion brings with it conflict and
deforestation, as described in Box 4.

18
Box 4: Liberia, a new frontier for deforestation

Farmer Eric Pyne at the new gate built by Equatorial Palm Oil at their Butaw plantation, Liberia
(2014). Anna Fawcus / Oxfam America

KLK also has a subsidiary company embroiled in allegations of human rights
abuses and deforestation in Liberia. The subsidiary, Equatorial Palm Oil
(EPO), has signed oil palm concession agreements that pave the way for the
large-scale development of land, including forested land, in Liberia. Clearing
forests is a major source of harmful carbon emissions. Farmers in Liberia are
reporting that changing weather patterns are already damaging crops and
leading to food shortages.
Just outside the southern Liberian community of Komonah sits EPO‟s Butaw
palm oil plantation. Through a joint venture with KLK, EPO is gradually
regenerating an old plantation, and local people say they are poised to
expand by clearing swathes of land that could include virgin forest. They are
very worried about the risks to their livelihoods and their families.
More than 40 percent of Liberia‟s land is forested. The forests are critical for
many rural communities who depend on the land to support their families,
using them to hunt, fish, and gather wood for building. EPO has published a
statement promising that it will only operate on land that has already been
cleared, will not clear natural forests to create land for its plantations, and will
aim to minimize greenhouse gas emissions. But there are questions hanging
over EPO‟s record to date. The company has faced complaints about human
rights abuses from communities living on land that EPO has cleared for
plantations in Liberia.
In September 2013, communities in Grand Bassa county filed a complaint
with the Roundtable on Sustainable Palm Oil (RSPO) against EPO, accusing
them of destroying farms, crops, and a local school without the consent of
the community.
106
In December 2013, a coalition of national and international
NGOs accused EPO of being involved in the arbitrary arrest and assault of
community members who claim they were resisting EPO‟s attempts to take
their land. EPO has denied these allegations.
Some community members living close to the Butaw plantation fear the loss
of their land, and many of the villagers say that they have not benefitted from
the creation of jobs on the plantation.
“We don‟t want this company to operate on our land,” says Eric Pyne, a
married father of five who grows rice, cassava corn, and other vegetables on
around two hectares of land in the community. “There will be no benefit to
our children. No drinking water, we don‟t have latrines, we don‟t have road
connections, we don‟t have school.”
EPO plans to more than double its palm oil planting in Liberia by the end of
2014.
107
Over the next 20 years the company plans to expand to 100,000 of
its 169,000 hectares ― the equivalent of 186,873 American football fields.
108

19
Rating the Big 10 on setting and implementing
plans for zero deforestation
Palm oil is used in everything from margarine, breakfast cereals,
chocolate, instant noodles, and ice cream, to shampoo, detergent, and
auto fuel.
109
It comprises 65 percent of all vegetable oils produced, and is
used in about half of all packaged foods.
110

Palm oil provides a compelling illustration of how the Big 10 companies
and their supply chains drive climate change, and deplete the carbon
resources that are essential to mitigating the unfolding climate crisis. But
palm oil also provides an opportunity for the Big 10 to exert their
influence to reverse climate change and to increase social benefits for
the millions of people worldwide who produce it.
Nearly all of the Big 10 rely on palm oil for many of their products,
together using 6 percent of the world‟s palm oil supply, nearly 3.5 million
metric tons.
111
Yet, their influence reaches far beyond that, as these
companies have the economic clout to drive more sustainable practices
throughout the palm oil supply chain. They can ensure that KLK, Cargill,
and other big traders of palm oil and other commodities make it a priority
to source their supplies responsibly.
Some of the Big 10 have used this influence effectively in the Roundtable
on Sustainable Palm Oil (RSPO). Launched in 2004, the RSPO is the
most widely used certification standard for palm oil, having certified
around 8.2 million tons as of 2013.
112
But only about half of that certified
supply is purchased, so challenges remain to expand the sustainable
palm oil market.
113

The fight for sustainable palm oil illustrates the gap between industry
leaders and laggards. Unilever, a top palm oil consumer (using roughly 3
percent of global supplies), is committed to sourcing 100 percent of its
palm oil from certified sustainable suppliers.
114
The company reached
that goal in 2012,
115
followed by Nestlé in 2013.
116
Other companies still
have a long way to go: only 17 percent of PepsiCo‟s palm oil is certified
sustainable. While Mars rates better at 56 percent, General Mills sources
less than half of its 56,041 tons sustainably.
117
Nestlé is working to make
its palm oil traceable back to the plantation, and now has a process in
place for reporting and verifying progress. However, Nestlé could further
strengthen its commitment by requiring suppliers to disclose the GHG
footprint of their production processes.
To their credit, both General Mills and Kellogg have recently made strong
new commitments and policies for zero deforestation for their palm oil
sourcing, going beyond the RSPO's minimum GHG requirements. These
include a commitment to no deforestation, and to buy all their palm oil
from fully traceable, certified sustainable sources by the end of 2015.
These welcome moves are part of a recent momentum for change in the
sector that has seen similar commitments from major palm oil traders
such as Wilmar, and other food companies such as Mars, which have in
key respects gone beyond the commitments of previous industry front-
runners, including Unilever and Nestlé.
118
Mondelēz has made some
partial progress in the right direction. But the glaring lack of such
commitments by PepsiCo, Danone, and ABF is now increasingly difficult
to justify.
20
While these are important advances, recent experiences in Liberia and
Indonesia (Boxes 3 and 4) highlight the urgency with which General Mills
and Kellogg must put their commitments on palm oil into practice, with
robust implementation plans that include key milestones for fulfilling the
policy, as well as commitments to regular transparent reporting on progress
and verification mechanisms. Without this, they may prove to be little more
than warm words and paper promises. Worse, they could end up causing
more social harm than environmental good, if community land rights are not
fully respected in their implementation.
119
General Mills has neither set clear
milestones nor committed to regular reporting, while the milestones Kellogg
has set do not pass muster. Of the Big 10, only Unilever and Nestlé have
set clear and transparent implementation plans that are reasonably robust.
The state of play on sourcing palm oil has changed dramatically in recent
weeks, with companies making new commitments on deforestation.
Timelines have become more ambitious with companies now focused on
2015. It remains to be seen how those setting such ambitious deadlines will
actually implement them. In the meantime, frontrunners like Unilever and
Nestlé have been working with their suppliers to meet their commitments by
2020 and 2018 respectively. Table 5 is meant to give a snap shot analysis
of the commitments at a given point in time ― the true test for these
commitments, however, will be when zero deforestation in palm oil and
other commodity supply chains is fully realized.
Figure 5. Big 10 ratings on policies to prevent deforestation in
supply chains

To their credit, most of the
Big 10 have now made
commitments to zero
deforestation in their palm
oil supply chains. The
glaring lack of such
commitments by PepsiCo,
Danone, and ABF is
increasingly hard to justify.
While there is real
momentum for change in
the palm oil sector, only
Mars, Nestlé, and, to some
extent, Unilever have
extended their palm oil
commitments to other
commodities.
21
The investigations in Indonesia and Liberia show that much work remains
to be done across the sector. The Big 10 must urgently exert pressure on
commodity traders and other brands to adopt ambitious deforestation
policies with concrete and verifiable implementation plans, and
monitoring and public reporting mechanisms that exceed RSPO
commitments. These policies should include commitments to sourcing
100 percent RSPO-certified palm oil by the end of 2014, and 100 percent
traceable RSPO-certified palm oil by the end of 2015.
Investments in smallholders, such as the approach described in Box 5,
will also help achieve these commitments and create a win–win situation
for communities and companies alike.
Box 5: Getting a FAIR deal for communities in areas of palm oil
production
Sustainable palm oil sourcing can create benefits for communities,
companies, and the climate. It can create important opportunities to
increase land efficiency and productivity on small-scale farms.
120

New research from Aidenvironment, commissioned by Oxfam, points the
way forward for companies wishing to work with communities to implement
sustainability commitments that can increase productivity and reduce
emissions, while benefiting both companies and communities. The report
points to four key principles for its company–community partnership
approach: Freedom of choice, Accountability, Improvement, and Respect
for rights (FAIR).
The four FAIR principles are not new standards, but support existing palm
oil sustainability initiatives. Trading companies, brands, and investors can
support suppliers to use these win–win principles to revitalize low-
productivity land and embrace small-scale farmers as environmentally
sound business partners. Sustainable farming can generate productivity
gains without excessive use of agro-chemicals. National and local
governments can be crucial allies in this, creating forest protection rules to
effectively protect land and the climate.
A recent World Bank survey found that investments that are well integrated
within the surrounding community are likely to be financially successful and
have a pro-poor impact. But investors who leave consultations to host
governments often face costly disputes.
121
These tensions can undermine
climate goals, livelihoods, and businesses. Companies and communities
can turn this around by building FAIR partnerships.

This momentum for change in the palm oil sector shows the impact that
changing company supply chains can have. Yet there has been far less
progress in supply chains of other key commodities driving deforestation.
More than half of agriculture-related deforestation paves the way for
pasture and feed crops for cattle. Soybean production is responsible for
19 percent of crop-related deforestation, while maize causes 11 percent,
and oil palm expansion 8 percent. Rice and sugarcane round out the
deforestation food basket, causing 6 percent and 5 percent of the forest
loss respectively.
122
Neither General Mills nor Kellogg has extended its
palm oil policy to other commodities.
123
Only Mars, Nestlé, and, to some
extent, Unilever have taken this crucial next step.
22
3 THE BIG 10 NEED TO
RAISE THEIR VOICES
FOR CLIMATE ACTION
While there is plenty more that the Big 10 can do to get their own house
in order on climate change, they cannot address the climate risks to the
food system through their actions alone. Taking their moral and business
responsibilities on climate change seriously means they must also
become active voices in the wider debates on climate action among
business, governments, and the public.
Christiana Figueres, Head of the UN Framework Convention on Climate
Change (UNFCCC), has called for companies to urgently step up and
counter regressive lobbying from fossil fuel-based industries such as coal
and oil: “If we don‟t have a voice that is equally as orchestrated, with
arguments that are at least as compelling, then governments are going to
be taking very timid decisions and they are not going to be tipping the
scales.”
124
Yet with only a few notable exceptions, the Big 10 are acting
like silent witnesses to this crisis ― acknowledging the risks of climate
change, but remaining on the sidelines in efforts to address them.
Rating the Big 10 on advocating for climate
action
A simple barometer of the engagement of the Big 10 in climate advocacy
is whether the companies have signed the recent Corporate Leaders
Group (CLG) Trillion Tonne Communiqué.
125
This recognizes the limited
global carbon budget described by the IPCC and calls for zero net
emissions in the second half of the century. Of the Big 10, only two ―
Unilever and Mars ― have signed up (see Figure 6). As Paul Polman,
CEO of Unilever, said when promoting the communiqué: “We recognize
for the first time that, purely in monetary terms, the cost of inaction is
starting to become bigger than the cost of action.”
126
The silence from his
food and beverage industry peers has been deafening.

“If we don't have a voice
that is equally as
orchestrated [as the fossil
fuel industry], with
arguments that are at least
as compelling, then
governments are going to
be taking very timid
decisions and they are not
going to be tipping the
scales.”
Christiana Figueres,
Executive Secretary,
UNFCCC
23
Figure 6. The Big 10 rated on climate advocacy
127

However, real climate leadership means going beyond joining collective
sign-on statements, and engaging in proactive advocacy on key food and
climate legislation at national and regional levels.
Among the Big 10 companies, Kellogg and General Mills are the only two
that do not directly engage with governments in efforts to positively
influence climate change policy.
128
But none of the companies are doing
enough. US Senator Sheldon Whitehouse, a Rhode Island Democrat and
a strong advocate of climate action who convened hearings on climate
change in April, said, “I'd love to see the CEOs of Coke and Pepsi on a
screen saying that „we compete like crazy with one another, but one thing
that we all agree on is that climate change is real‟.”
129

Despite spending tens of millions of dollars on lobbying, funding major
campaigns on everything from sugar taxes to GMO labeling, these
companies have failed to use their collective voice to advocate for
government-led efforts to address climate change. In the intensive
lobbying on the 2009 US Clean Energy and Security Act, for example, the
Big 10 were all but absent in a debate dominated by energy and biofuels
companies. Of 1,002 organizations registered to lobby on the legislation,
there were just 3 from the Big 10 (Nestlé, Unilever, and PepsiCo), who
between them submitted 19 lobby reports, compared with more than 200
from the biggest 10 energy companies and at least 100 from biofuels
companies.
130
The Big 10 have submitted no lobbying reports at all on the
“I‟d love to see the CEOs
of Coke and Pepsi on a
screen saying that „we
compete like crazy with
one another, but one thing
that we all agree on is that
climate change is real‟.”
US Senator Sheldon
Whitehouse
The Big 10 submitted just
19 lobby reports on the US
Clean Energy and Security
Act, compared with more
than 200 from the biggest
10 energy companies, and
at least 100 from biofuels
companies.
24
ongoing debate over the Keystone XL pipeline.
131
They have been no
more active in Europe. Of 168 groups reported to have lobbied the
European Parliament's rapporteur on the landmark revision of the EU's
Emissions Trading Scheme in 2008, none were from the Big 10.
132

The Big 10's role in advocating against the expansion of biofuels in
recent years, especially in the EU context, shows the political influence
and clout they can have.
133
Now they must use it in wider climate policy
debates.
Pushing trade associations to advocate for
climate action
Often, the companies will leave it to their industry trade associations to
engage with decision makers on climate policy. Yet in many cases, this is
a dangerous and irresponsible approach.
Some companies, including Mars, Nestlé, Unilever, and Coca-Cola, are
engaged with progressive coalitions such as Business for Innovative
Climate and Energy Policy (BICEP) in the US.
134
But just as significantly,
others are actively supporting business lobby groups such as the US
Chamber of Commerce (USCC), Business Europe, and the Australian
Food and Grocery Council ― all of which have attempted to block action
on climate change.
Coca-Cola has board membership with the US Chamber of Commerce,
and like PepsiCo, is a contributing donor,
135
and all of the Big 10 are
associated with Business Europe through various national business
federations.
136
The role of both USCC and Business Europe in consistently
opposing strong climate action has been widely documented, leading
several major companies such as Apple, Nike, and Johnson & Johnson to
publicly leave the USCC or key positions within it, or to denounce its policy
stance.
137

But the food and beverage industry associations are hardly shining
examples of climate leadership either. General Mills, Kellogg, PepsiCo,
and Unilever are board members of the Grocery Manufacturers
Association,
138
which does not even seem to have a clear position on
climate change ― as Unilever notes in its submission to CDP.
139

FoodDrinkEurope barely mentions the importance of the EU's 2030
Climate and Energy Package in its priorities for the Greek Presidency of
the EU.
140
Worse, the Australian Food and Grocery Council took a
position actively supporting the repeal of the Australian carbon tax
legislation.
141

It is clear that, at times, the food and beverage industry has not just been
silent, but has veered far off message. At the 2014 World Economic
Forum, Nestlé CEO Peter Brabeck told UK newspaper the Guardian that
climate change is “an intrinsic part of the development of the world” and
asked, “Are we God to say the climate, as it is today, is the one we have
to keep?”
142

While Nestlé tops Oxfam‟s Behind the Brands scorecard, with an 8 on
climate change, this shows the company still has much work to do to
align its public communications about climate issues with its policies.
The Australian Food and
Grocery Council took a
position actively
supporting the repeal of
the Australian carbon tax
legislation.
25
Without a unified front by the food and beverage sector, the well-
organized fossil fuel industry lobby will continue to win the political battle
over climate change. It is time for the food and beverage industry to
confront this head-on.
To their credit, Coca-Cola is the only company in the Big 10 to note that
the positions of USCC and Business Europe are “not consistent” with its
view on climate change in its CDP submission. Coca-Cola has also
distanced itself from Business Europe in terms of its public position on
EU climate action.
143
Unilever has recently taken the commendable step
of withdrawing its direct business affiliation with Business Europe,
effective from June 2014.
144

However, these examples aside, none of the other companies are
proactively calling on these hugely powerful associations, which have
done such harm to the prospects of ambitious climate legislation in the
biggest emitters among developed countries, to change their positions or
publicly distance themselves from them. And none of the companies are
doing enough to ensure that the food and beverage industry associations
that represent them develop strong policies and advocacy messages on
climate action. This must change. If the Big 10 are serious about
addressing the climate risks they publicly acknowledge, they must
actively push their industry and its representatives to shape public debate
and policy that confronts climate change responsibly.

26
4 CONCLUSIONS AND
RECOMMENDATIONS
What the Big 10 food and beverage companies
must do
As climate change intensifies, there is a growing humanitarian and
economic urgency to do everything possible to reduce GHG emissions.
As a significant driver of climate change, the food and beverage industry
must act now to address its own significant climate impacts, and step off
the sidelines to proactively advocate for greater climate action from
others. As Oxfam‟s Behind the Brands scorecard shows, none of the Big
10 companies is doing enough, but General Mills and Kellogg in
particular are failing to do their part.
The good news is that the knowledge and tools needed to greatly reduce
the impact of the food and beverage industry on the climate are already
here; change is largely a matter of companies‟ political will and
commitment.
Markets for certified sustainable palm oil, sugar, and other commodities
are steadily expanding. External pressure, combined with leadership
from employees and innovators within companies, have pushed top
companies to begin to address their own land-use practices, as well as
their larger carbon footprint from packaging, shipping, and energy use.
More can be done to focus on what is happening in their supply chains.
Innovations in measurement and disclosure, such as the Cool Farm
Tool,
145
make it easier for farmers to understand where their emissions
are coming from, and to identify opportunities for reductions. After
PepsiCo UK found that 50 percent of its carbon footprint came from
agricultural raw materials upstream in the supply chain, they set a goal of
reducing 50 percent of their water use and carbon emissions over five
years ― the “50 in 5” goal.
146
If this commitment were made across the
Big 10, emissions from agricultural production could be cut by around 80
million tons compared to business-as-usual by 2020 – a similar order of
magnitude to the emissions reduction pledges made by South Africa or
Mexico for the same period.
CDP also incentivizes companies to report their emissions and climate
risks comprehensively, and provides a good basis for measuring
improvements over time. Companies, such as Unilever and Nestlé, are in
the lead because they have adopted tools like these, and are making
related commitments.
Evidence shows that nations and companies can maintain agricultural
production while reducing emissions.
147
By investing in agricultural
production that prioritizes smallholders and up-scaling of sustainable
agriculture rather than expansion, the industry can reduce emissions
significantly.
148

27
To help build the political will to make all this possible, Oxfam is calling on
Kellogg and General Mills, clear industry laggards, to lead the way
forward with strong new commitments. These steps are applicable to the
entire industry. Oxfam is calling on each company to understand the full
scope of its GHG emissions across their agricultural supply chains, and
to commit to meaningful reductions in the sector as part of science-based
reduction targets. Companies can contribute to significant emissions
reductions by ensuring that their entire supply chain adopts more
sustainable practices. In particular, companies should support farmers
and smallholders to use ecologically restorative farming practices that
avoid land-clearing, synthetic fertilizer use, and other sources of GHG
emissions.
Just as importantly, the companies must start now to actively engage
governments and other industries to take action to aggressively reduce
their emissions too. At the end of 2015, world leaders will seek to agree a
new global climate change agreement under the UNFCCC in Paris, and
UN Secretary General Ban Ki Moon has convened a special summit to
build momentum on climate action in September 2014. Now is the
moment for leaders in the food and beverage industry to decide where
they stand in the climate debate that will dominate political attention over
the next 18 months.
By changing their food production and agricultural practices, the Big 10
companies can play a significant role in reducing the most harmful effects
of climate change. By using their own political and economic clout and
drawing on their own experiences of climate risk, they can help to shift
the wider politics of climate action. If they are successful, they could
provide a model for the future of sustainable and equitable food
production, helping the world reach a target of zero hunger, in a safer
climate.
RECOMMENDATIONS
Specifically, food and beverage companies should:
Know and show their climate change emissions, including
emissions in their supply chains.
1. Measure and disclose GHG emissions in the companies‟ agricultural
value chains;
2. Disclose their exposure to the risks of deforestation and degradation of
forests and peatlands;
3. Disclose suppliers of commodities that are drivers of deforestation,
degradation, and land-use change, including volumes of commodities
with high GHG emissions footprints, such as palm oil, soy, sugarcane,
maize, and dairy, and their countries of origin;
4. Disclose volumes of commodities with high GHG emissions footprints,
or originating from countries with high GHG emissions.
28
Commit to quantifiable greenhouse gas emissions reductions.
5. Require “high climate risk” commodity suppliers to measure and
disclose GHG emissions and to establish clear, quantifiable GHG
emissions reduction targets, providing support to suppliers and working
with smallholders where necessary;
6. Commit to clear, quantifiable GHG emissions reduction targets in their
agricultural value chains;
7. Commit to developing emissions reduction targets that are sustainable
when measured against a 2°C temperature change threshold;
8. Commit to developing a time-bound plan related to the sourcing of
commodities with high GHG emissions footprints, in order to prevent
further deforestation and degradation of forests and peatlands while
protecting the rights of communities living on these lands; and to prevent
expansion of agriculture within High Carbon Stock and High
Conservation Value areas, while avoiding any infringement on land,
human, and labor rights.
Advocate for ambitious action to combat climate change.
9. Sign on to a public statement committing to bold action on climate
change, and conduct additional advocacy actions that urge governments
to create ambitious climate change-related policies and programs;
10. Examine climate policies of industry associations of which the
company is a member to understand their positioning on climate action
and to determine whether that association has worked to undermine
progressive climate policy. Work proactively within each trade association
to push for constructive engagement on climate issues;

11. Commit to reviewing and revising company statements on climate
change for consistency with a 2°C global target, preferably based on the
UN Global Compact‟s Caring for Climate format, and make details of this
internal review publicly available.
149

29
APPENDIX
Excerpt from IPCC (2014) “Summary for Policy Makers”, Figure 7, in
“Climate Change 2014: Impacts, Adaptation, and Vulnerability”,
IPCC Working Group II Contribution to AR5, http://ipcc-
wg2.gov/AR5/images/uploads/IPCC_WG2AR5_SPM_Approved.pdf
Emissions scenarios giving a reasonable chance of keeping global
warming below 2°C require net emissions from agriculture, forestry and
land-use change to become a significant net sink by mid-century. In the
absence of such a sink, scenarios require significant use of unproven
and risky technology for Carbon Capture and Storage (CCS).

44 Projected price increases were generated by translating the previously estimated impacts of
climate change by the year 2030 on rice, corn and wheat prices into impacts on the prices of
selected consumer food products that contain those grains. Oxfam used historical grain and
consumer product prices, product ingredient lists and nutrition labels, and historical examples of
how rising commodity prices affect retail prices to build a model that estimates the potential
increases in retail prices that will result from climate change.
45 Ibid.
32

46 Carbon Disclosure Project (2013) “Reducing Risk And Driving Business Value: CDP Supply
Chain Report 2012-13”, Carbon Disclosure Project, https://www.cdp.net/CDPResults/CDP-
Supply-Chain-Report-2013.pdf
47 Company responses to Carbon Disclosure Project (2013), https://www.cdp.net/en-
US/Results/Pages/responses.aspx
48 Kellogg\s submission to Carbon Disclosure Project 2013, https://www.cdp.net/en-
US/Results/Pages/responses.aspx. The Behind the Brands climate change scorecard (2014)
shows that all but General Mills and Mondelēz recognize climate change impacts on the
company and on communities, and all Big 10 companies recognize the need to reduce emissions
from their agricultural supply chain. http://www.behindthebrands.org/en/company-scorecard
49 This estimate is based on the following components: global emissions from agricultural
production – 10-12% of global emissions (IPCC AR5 WGIII, 2014); emissions from land use
change attributed to agriculture, assuming agriculture accounts for 75% of deforestation – 8.25%
of global emissions (IPCC AR5 WGIII, 2014; CGIAR CCFAS Big Facts); emissions from energy
use in agriculture – 0.87% of global emissions (IPCC AR5 WGIII); emissions from pre- and post-
production sources – 5.5% of global emissions (based on Vermeulen et al., 2012); emissions
from international transport, assuming 10% of global shipping emissions attributed to shipping
food – 0.15% (UNCTAD, 2011; FAOStat; IPCC AR5 WGIII).
50 Emissions from transport account for 14 percent of the global total. IPCC (2014) “Summary for
Policy Makers”, Section 2, op. cit.
51 IPCC (2014) “Summary for Policy Makers”, Section 7, op. cit.
52 F.N. Tubiello et al. (2014) „Agriculture, Forestry and Other Land Use Emissions by Sources and
Removals by Sinks: 1990 – 2011 Analysis‟, Food and Agriculture Organization,
http://www.fao.org/docrep/019/i3671e/i3671e.pdf
53 M.C. Hansen et al. (2013) „High-Resolution Global Maps of 21st-Century Forest Cover Change‟,
Science, Vol. 342 (6160), pp. 850-853, http://www.sciencemag.org/content/342/6160/850
54 Company responses to Carbon Disclosure Project (2013), https://www.cdp.net/en-
US/Results/Pages/responses.aspx; and Climate Analysis Indicators Tool (CAIT 2.0), World
Resource Institute, http://cait2.wri.org/wri
55 Kellogg‟s submission to Carbon Disclosure Project (2013), https://www.cdp.net/en-
US/Results/Pages/responses.aspx
56 Mars, „Climate Change‟, http://www.mars.com/global/about-mars/mars-pia/our-approach-to-
business/defining-our-approach/climate-change.aspx
57 General Mills did an assessment that was conducted in 2012. The Trucost findings were not
reported in their CDP 2012 or 2013 investor reports. An update of that analysis was not provided
in their 2014 Global Responsibility Report, indicating that this is not an analysis that they are
conducting on an annual basis. In addition, the amount of emissions were not disclosed, just the
percentages.
58 General Mills (2013) „Global Responsibility 2013‟,
http://www.generalmills.com/~/media/Files/CSR/2013_global_respon_report.ashx
59 Based on the average percentage of Scope 3 emissions from “Purchased goods and services”
as a percentage of total emissions from each of the Big 10 companies for which data are
available.
60 I.e. greater than the entire sector's Scope 1 and 2 emissions among the biggest 500 companies
from IT, industrials, healthcare, financials, telecommunications, consumer staples and consumer
discretionary. The implication being that if the Scope 1 and 2 emissions from these sectors
matter in efforts to fight climate change, then so must the emissions from agricultural production
of the Big 10 food and beverage companies.
61 Based on estimated emissions of an “average” 500-megawat coal-fired power plant.
Greenpeace (2010) „Coal Power Plants‟,
http://www.greenpeace.org/international/en/campaigns/climate-change/coal/Coal-Power-Plants/
62 Based on the EPA's estimated incremental emissions from Keystone XL of 1.3-27.4 MTCO2e
per year. US Department of State (2014) „Chapter 4: Environmental Consequences‟, in „Final
Supplemental Environmental Impact Statement for the Keystone XL Project‟,
http://keystonepipeline-xl.state.gov/documents/organization/221190.pdf
63 Oxfam (2014) „Building a New Agricultural Future: Supporting agro-ecology for people and
planet‟ Oxfam International, http://www.oxfam.org/en/grow/policy/building-new-agricultural-future
64 Approximately 3 Gt CO2e (gigatonnes of carbon dioxide equivalents) per year by 2030 could be
mitigated through changes in diet and reductions in food waste compared to a business-as-usual
scenario; and approximately 2 Gt CO2e per year from supply-side measures that are beneficial
to producers and to yields (not including potential from carbon sequestration in soils).
A. Dickie et al. (2014) „Strategies for Mitigating Climate Change in Agriculture:
Recommendations for Philanthropy‟, Climate Focus and California Environmental Associates,
http://www.climateandlandusealliance.org/uploads/PDFs/Strategies_for_Mitigating_Climate_Cha
nge_in_Agriculture_Full_Report.pdf
65 Oxfam (2013) op. cit.
33